CarNext.com offers leases and subscriptions on used LeasePlan cars

LeasePlan looked back at 2017 in its annual report, and at the same time forward, with an ambitious, five-pillared Strategic Update. Last year was good; the future, LeasePlan believes, will be even better, as it prepares to offer used-car subscriptions and leases via CarNext.com.

'The Power of One LeasePlan' is working. Following new CEO Tex Gunning's introduction of the streamlining operation, LeasePlan last year saw its net result rise by 10% to €467 million. On its own, 'One LeasePlan' generated savings of €130 million. The lease company's global fleet grew by 5.5%, reaching 1.7 million vehicles.

The excellent results confirm the company's resolve to continue down its strategic path towards the CaaS (Cars as a Service) model, or as it likes to call it: "Any Car, Anywhere, Anytime". The focus is firmly on the new-car CaaS market in Europe, worth €68 billion and counting; and the high-quality used-car market in Europe, valued at €65 billion and up.

"We have more cars on the road than ever, while our underlying net result and return on equity continue to increase significantly", said Mr Gunning (pictured). "This underlines how strong and resilient we are. Looking ahead, we can achieve so much more. Increasingly, our customers want a Car-as-a-Service with no strings attached in terms of car type and duration. LeasePlan will lead this trend".

That strategy now firmly rests on five pillars:

Continue to grow the Car-as-a-Service business model

The CaaS market, which encompasses subscription-based mobility solutions with integrated services, is expected to grow at 5.2% CAGR from 2016 to 2025, by which time CaaS will have penetrated about 6.8% of the total European car park (in 2016: 4.8%). LeasePlan will target growth in the most attractive and service-intensive segments of the market, i.e. Corporate, SME and Mobility Platform customers, offering innovative services and products in repair and maintenance, insurance, and low-emission vehicles.

Launch CarNext.com

At around 250,000 units per year, LeasePlan is Europe's largest reseller of high-quality 3- to 4-year-old cars. To capitalise on this, the company last year created CarNext.com - a platform that offers the unprecedented flexibility to buy, lease or subscribe high-quality used cars. LeasePlan is "in a unique position to disrupt this market and generate significant incremental profits", the company says. CarNext.com will operate mainly via its online platform, supported by a network of 50 delivery stores throughout Europe. The platform will eventually be widened to include trusted third-party owners of high-quality used cars.

Drive operational excellence through 'The Power of One LeasePlan'

Historically, LeasePlan was a multi-local organisation. 'The Power of One LeasePlan' created a fully integrated global operating model. By implementing best practices and leveraging its global scale, LeasePlan will continue to create value for its shareholders, improve its customer service and continue to grow. Nearly half the benefits will come from reducing operating expenses. In 2017, 'One LeasePlan' realised a profit of €130 million before tax, compared to the 2016 baseline, out of a total target of €370 million. The drive will continue for the foreseeable future.

Roll out LeasePlan Digital

Launched in 2017 and focused on the LeasePlan Digital Hub in Amsterdam, LeasePlan Digital aims to transform the company from an analogue into a fully digitally-enabled business, delivering digital services at digital cost levels and preparing LeasePlan for autonomous fleet management. Specific focus areas: customer engagement and building a digital market platform for CarNext.com.

Eliminate net emissions from its total fleet by 2030

From 2011 to 2017, the CO2 footprint of LeasePlan's diesel fleet improved by 4.8% p.a., and by 4% p.a. for its petrol fleet. In support of the Paris Agreement, LeasePlan's own employee fleet will go electric by 2021, and it will educate customers in what's next in low-emission vehicles, offering them attractive deals to make the transition.